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Civil law. Part II. Settlements under a letter of credit (the most important)

Lecture notes, cheat sheets

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89. PAYMENTS UNDER LETTER OF CREDIT

Bank acting on behalf payer on the opening of a letter of credit and in accordance with its instructions (issuing bank), undertakes to make payments recipient of funds or pay, accept or discount a bill of exchange or authorize another bank to do so (to the executing bank). Payment under a letter of credit can be made in cash or by bill of exchange.

Types of letters of credit: revocable - can be changed or canceled by the issuing bank without prior notice. notifications to the recipient (revocation does not create any obligations of the issuing bank to the recipient); irrevocable - cannot be canceled without the consent of the recipient. He can gain character confirmed letter of credit, if, at the request of the issuing bank, the executing bank confirms an irrevocable letter of credit; coated - creates the obligation of the issuing bank to transfer the amount of the letter of credit (coverage) at the expense of the payer’s funds or to provide the latter with a loan by transferring funds to the disposal of the executing bank; uncovered - based on the right of the executing bank to write off the entire amount of the letter of credit from the correspondent. issuing bank accounts; transferable (transferable) - used in foreign trade relations. According to it, the first beneficiary has the right to instruct the issuing bank to transfer all or part of the rights under the letter of credit to another person (the second beneficiary).

For the execution of the letter of credit, the recipient submits to the executing bank documents confirming the fulfillment of all the conditions of the letter of credit. If the executing bank has made payment in accordance with the terms of the letter of credit, the issuing bank is obliged to reimburse it for the costs incurred. All expenses of the issuing bank related to the execution of the letter of credit are reimbursed by the payer. If the executing bank refuses to accept documents, the cat. outwardly do not comply with the terms of the letter of credit, he is obliged to immediately inform the recipient and the issuing bank about this, indicating the reasons for the refusal. If the issuing bank, having received the documents accepted by the executing bank, considers that they do not conform to the terms of the letter of credit on their outward appearance, it has the right to refuse to accept them and demand from the executing bank the amount paid to the recipient of funds in violation of the terms of the letter of credit, and for an uncovered letter of credit refuse reimbursement of the amounts paid.

Responsibility for violation of the terms of the letter of credit before the payer is the issuing bank, and before the issuing bank - the executing bank.

The executing bank is responsible before: the recipient in case of unreasonable refusal to pay den. funds under a letter of credit; payer in case of incorrect payment of money. funds under a letter of credit due to violation of its terms.

Closing of a letter of credit in the executing bank is carried out:

a) after expiration term of the letter of credit;

b) at the request of the recipient to refuse to use the letter of credit before the expiration. its validity period, if the possibility of such refusal is provided for by the terms of the letter of credit;

at) at the request of the payer for full or partial withdrawal of the letter of credit, if such withdrawal is possible under the terms of the letter of credit.

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